CFPB Reverses Course: Seeks Compliance Authority on Military Lending
During his tenure as Acting Director of the Consumer Financial Protection Bureau (CFPB), Director of the Office of Management and Budget, Mick Mulvaney, made the decision to stop supervising lending to active duty service members. Instead, Mulvaney ordered the CFPB to wait for complaints from service members and their families to instigate investigations. The recently confirmed CFPB Director, Kathy Kraninger, sent a letter to congress last week asking for “clear authority” to supervise for compliance with the Military Lending Act.
In her proposal, Kraninger writes:
“The Bureau is committed to the financial well-being of America’s service members. This commitment includes ensuring that lenders subject to our jurisdiction comply with the Military Lending Act so our service members and their families are provided with the protections of that law. That’s why I have asked Congress to explicitly grant the Bureau authority to conduct examinations specifically intended to review compliance with the MLA. The requested authority would complement the work the Bureau currently does to enforce the MLA. I was pleased to see legislation proposed recently in the House of Representatives (H.R. 442) that is intended to grant the Bureau such authority. My hope is that bipartisan legislation advances as quickly as possible in the 116th Congress.”
Established after World War II to help returning soldiers become homeowners, the VA loan program is one of the most important benefits our military and Veterans receive and adhering to compliance when issuing VA loans is imperative. Lenders who issue VA loans will be among those impacted by the new proposal.
The VA loan is issued by private lenders and guaranteed by the US Department of Veterans Affairs. It is one of the most affordable mortgage programs because it does not require a down payment and has the option to finance closing costs. The VA loan is available for new purchase, interest rate reduction refinance loans, and various other scenarios. Qualifying active-duty military, Veterans, and surviving spouses are eligible for the VA loan, and can use this benefit more than once, as long as their previous VA loan account has been closed.
If you have any questions about the VA loan, let us know.